Effective Foreign Aid: Evidence from Gavi’s Vaccine Program*

Gavi, the Vaccine Alliance has provided over US$13 billion in funding for vaccination expansion in low-income countries since its founding in 1999. We exploit the differential timing in Gavi support across countries and vaccines to estimate the program’s effects. We find that, on average, Gavi’s support of a vaccine increased coverage rates by 3 percentage points and reduced child mortality from related causes by between 0.5 and 2 children per 1,000 live births. We estimate these improvements saved between 825,000 and 3.3 million lives and had an economic value ranging between US$76 billion to US$915 billion. Given the relatively low cost of Gavi’s programs, we argue that Gavi represents a particularly effective form of foreign aid. As Gavi’s programs are tightly linked to desirable development outcomes and can be rigorously evaluated, our results provide support for the broader notion that careful structuring of foreign aid programs can be substantially beneficial for low-income countries. JEL Codes: F35 (Foreign Aid), I15 (Health in Econ Dev.), O1 (Econ. Dev.)